QUITCO, FM CONSTI 1

TITLE: Casco vs. Gimenez,

PONENTE: Concepcion, J.:
FACTS:
1. On July 1, 1959, Central Bank of the Philippines issued R.A. No. 2609, Foreign Exchange Margin Fee Law,
with Circular No. 95: fixing uniform margin fee of 25% on foreign exchange transactions.
2. The Bank later promulgated a memorandum establishing the procedures for application for exception
from payment of fee as provided in R.A. No. 2609.
3. On Nov. And Dec. 1959, Petitioner, Casco Philippine Chemical Co. Inc. which is engaged in the
manufacturing of synthetic resins glue- bought foreign exchange for the exportation of Urea and
Formaldehyde.
4. On this transaction, they paid 33,765.42 for margin fee.
5. The 2
nd
transaction was on May 1960, where petitioners purchased another foreign exchange and paid
6,345.72 as Margin fee.
6. Before the second transaction though, on Nov. 3, 1959, Monetary Board of the said bank issued
Resolution No. 1539 declaring separate importation of Urea and Formaldehyde exempt from said fee.
7. Relying upon said Resolution, petitioners later sought the refund of said payments.
8. Though a voucher was issued for the refund, Auditor of the bank refused to pass in audit and approve the
refund, on the ground that the exemption granted by the Monetary board of petitioners separate
importation is not in accord with the provision of R.A No. 2609 which reads:
The margin established by the Monetary Board pursuant to the provision of section one hereof shall not
be imposed upon the sale of foreign exchange for the importation of the following:
XVIII. Urea formaldehyde for the manufacture of plywood and hardboard when imported by and for the
exclusive use of end-users.
9. The Auditor General affirmed the said action of the auditor bank, hence this petition for review.
ISSUE: Whether or not "urea" and "formaldehyde" are exempt by law from the payment of the aforesaid margin
fee.
RULING:
Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a condensation product
from definite proportions of urea and formaldehyde under certain conditions relating to temperature,
acidity, and time of reaction. This produce when applied in water solution and extended with inexpensive
fillers constitutes a fairly low cost adhesive for use in the manufacture of plywood.
Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct and different from urea" and
"formaldehyde", as separate articles used in the manufacture of the synthetic resin known as "urea formaldehyde".
Petitioner contends, however, that the bill approved in Congress contained the copulative conjunction "and"
between the terms "urea" and "formaldehyde", and that the members of Congress intended to exempt "urea" and
"formaldehyde" separately as essential elements in the manufacture of the synthetic resin glue called "urea"
formaldehyde", not the latter as a finished product, citing in support of this view the statements made on the floor
of the Senate, during the consideration of the bill before said House, by members thereof. But, said individual
statements do not necessarily reflect the view of the Senate. Much less do they indicate the intent of the House of
Representatives
Furthermore, it is well settled that the enrolled bill which uses the term "urea formaldehyde" instead of "urea
and formaldehyde" is conclusive upon the courts as regards the tenor of the measure passed by Congress and
approved by the President
If there has been any mistake in the printing ofthe bill before it was certified by the officers of Congress and
approved by the Executive on which we cannot speculate, without jeopardizing the principle of separation of
powers and undermining one of the cornerstones of our democratic system the remedy is by amendment or
curative legislation, not by judicial decree.
WHEREFORE, the decision appealed from is hereby affirmed, with costs against the petitioner. It is so ordered.